The SDR and Its Potential as an International Reserve Asset
Since the onset of the global financial crisis, there has been an upswing of interest among some prominent policy makers and academics in the International Monetary Fund's (IMF) Special Drawing Right (SDR) as a 'safe' international r...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2011/05/14251007/sdr-potential-international-reserve-asset http://hdl.handle.net/10986/10095 |
| Summary: | Since the onset of the global financial
crisis, there has been an upswing of interest among some
prominent policy makers and academics in the International
Monetary Fund's (IMF) Special Drawing Right (SDR) as a
'safe' international reserve asset. But
preexisting constraints on the SDR and the magnitude of
support required to push through the reforms necessary to
enhance the SDR's role make it unlikely that ambitious
aspirations for this 'quasi-currency' will be
realized. Moreover, the case for enhancing the SDR's
role has been somewhat overstated, as has the view that the
current international monetary system requires the dominance
of a single currency, namely the U.S. dollar. To a
significant extent, U.S. dollar dominance is the result of
specific policy choices by individual countries (for
example, export-led growth strategies, close links to the
U.S. dollar) rather than an inherent rigidity in the
international monetary system. Many of the problems that
some policy makers are seeking to address through a greater
role for the SDR can more easily be achieved in the context
of the continuing trend to a multicurrency reserve system. |
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